My guess would be that you daughter was taken in on SUSPICION of possession of a controlled substance. I have no personal experience with the other herb in question, but I would guess that it might be mixed in with a bit of basil to help cover the characteristic aroma. I also recall stories from the 1970's about people selling baggies of oregano to people who thought they were buying that other herb. We can assume that the cop didn't have a field test kit for THC with him, and he was probably smart not to simply rely on his own sense of smell.
All that having been said, your daughter was innocent and deserves to maintain her undefiled reputation in the community, so a lawyer should be asked for his opinion. If there is some money for your daughter at the end of this rainbow (there is ALWAYS money for the LAWYER, isn't there?) then she should accept it with gratitude to the cosmos. Every day guilty perps get property confiscated and turned into cash, so if she gets a minute fraction of that, more power to her.
I'm really glad your story had a happy conclusion.